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Which method of bankruptcy requires the entrepreneur to come up with a payment plan?

a) Chapter 7
b) Chapter 11
c) Chapter 13
d) Chapter 9

1 Answer

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Final answer:

The bankruptcy method that requires a payment plan is Chapter 13, which is different from Chapter 7's asset liquidation and is aimed at individuals with a regular income to repay their debts over a period.

Step-by-step explanation:

The method of bankruptcy that requires an entrepreneur to come up with a payment plan is c) Chapter 13. Unlike Chapter 7, which involves liquidation of assets, Chapter 13 allows individuals with a regular income to develop a plan to repay all or part of their debts. Debtors propose a repayment plan to make installments to creditors over three to five years. Chapter 11 is generally used by businesses and offers a reorganization plan to keep the business alive and pay creditors over time. Chapter 9 is for municipalities and other local government entities.

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